It’s not a topic most people are fond of. Death is a natural part of our lives which also involves strategic financial preparation. Getting Term Life insurance or Permanent Life Insurance also means arranging the best scenario for your spouse and children.
Suffering from a long illness causes a lot of strain on your family’s finances and after a member dies the remaining people are left with the burden of paying for the accumulated bills even during a time of grief.
Getting protection early is the best way to avoid subjecting your family to such tragic circumstances. Here are ways you can prepare and secure them financially.
Expecting the worst may not be the most pleasant means of preparation but it is the best. An extreme scenario would be falling ill for an extended period of time and failing to claim your insurance or perhaps not being covered at all. Calculate for how much long-term care would cost including associated bills.
Term Life Insurance can protect you and your beneficiaries within a set period usually up to 30 years. Your family receives the payout if you die before the policy ends. Some Term Life Insurance will cover critical illness expenses depending on the listed benefits.
Permanent Life Insurance will cover you indefinitely for as long as you are paying the premiums. This type of life insurance allows the holder to cancel the policy and cash out the premiums that have been paid at any time. Ask your insurance broker which type of life cover suits your needs.
Take cancer as a worst case scenario. If it runs in your family then the probability of getting the disease will be higher. The cost of eight weeks of chemotherapy in Hong Kong can range from HK$100 to $30,000. Cost of cancer chemotherapy also depends on other factors such as choice of drugs as well as frequency and duration of treatment. Hospital charges further add to the cost of the prescribed drugs. It is easy to imagine how your savings can get depleted without an insurance policy to cover part of the expenses. There are a number of life insurance policies that cover critical or terminal illness. These plans cover treatments and a few prescription drugs. Talk to your insurance broker as these details may vary.
Add the inability to pay for funeral costs to your worst case scenario. There are other means of paying for this type of expense such as a separate funeral plan but if this is not the case a life insurance policy will be able to cover the fees if it is included in the benefits. Term Life Insurance policies often add funeral costs. Expenses for a funeral require payment for a funeral director, storage of the body, a coffin, cremation (if preferred), funeral car and more.
The average cost of a funeral in Hong Kong is HK$7,775, cemetery costs excluded. A grave space, a grave marker and opening & closing the grave can easily cost another HK$1,500 to $2,500. A traditional funeral and burial can go as high as HK$9,000. Adding this amount to unpaid hospital bills is a burden no one would want to place on the people we leave behind which makes it all the more crucial to prepare.
The spouse is often the primary listed beneficiary but we advise adding your children if the policy allows for it. Again, expect the worse which may mean an unexpected event with your spouse shortly after you’re gone.
Be wise about who you list as your beneficiaries and choose a life cover that allows one or more listed recipients of the payout (if any). Term and Permanent life insurance allows for this type of arrangement but the number of beneficiaries will vary.
Village Insurance will guide you through the process of preparing for the worst case so you can protect your family.
Contact us here for any questions you might have about Life Insurance.
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